Occidental (NYSE: OXY) hosted its Oxy Low Carbon Venture Investor Update on Wednesday March 23, 2022 in which the company outlined its low emissions strategy and focus on the technology, commercialization, capitalization and development of direct air capture (DAC).
It announced it will be spending between $800 million and $1 billion on a facility to remove carbon dioxide (CO2) from the air in an effort to advance its energy transition business.
The DAC facility is the world’s largest direct air capture (DAC) project and is set to begin construction in the second half of this year in the U.S. Permian Basin. It is expected to start operations in 2024.
Occidental will also invest in three carbon sequestration hubs that will be online by 2025 and 70 direct air capture facilities by 2035. That ambitious plan is marking the beginning of the energy transition for the whole company into an emissions reductions leader and solutions provider.
The company’s low carbon business has invested $275 million this year. It is expected to generate more money for investors compared to its current chemical operations, according to CEO Vicki Hollub.
“There’s just not going to be enough other alternatives for CO2 offsets… So this is a sure opportunity,” said Hollub.
Oxy shares gained 1.41% to $60.48 in early trading on Wednesday.
Occidental’s direct air capture initiative is scaling up with a recent deal made with SK Trading International for an import of 200,000 barrels of net-zero oil per year from 2025. The company announced it will be using CO2 captured from its DAC facility for the production of low carbon oil which is set to establish its new path towards sustainability and low emissions from operations.